EPFO limit raised to ₹25,000, but unions want ₹30,000: What employees stand to gain
The government has raised the monthly wage ceiling for mandatory EPFO coverage from ₹15,000 to ₹25,000, bringing employees earning between ₹15,000 and ₹25,000 within the statutory social security framework. But the change has already drawn criticism from the All India Trade Union Congress (AITUC), which says the new limit is still not high enough and should be increased to ₹30,000.
For employees, the key question is simple: who gets EPF coverage under the new rule, and what does the change mean for their salary and social security?
The revised ceiling came into effect on September 17, 2026, after the Union Cabinet approved the proposal on September 16. The government expects the move to bring more than 51 lakh additional employees under mandatory EPFO coverage.
What has changed in the EPFO wage limit?
Until now, the wage ceiling for mandatory EPFO coverage was ₹15,000 a month. That limit has now been increased to ₹25,000.
This means employees earning between ₹15,000 and ₹25,000 a month can come under mandatory EPFO coverage, subject to the applicable scheme provisions. The coverage includes benefits under the Employees' Provident Fund, Employees' Pension Scheme and Employees' Deposit Linked Insurance Scheme.
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The ceiling had last been revised in September 2014. The latest increase therefore comes after a gap of about 12 years.
Why does the change matter to employees?
For workers who were previously outside mandatory EPFO coverage because their wages were above the old ₹15,000 ceiling, the change can bring them into the formal social security system.
That means access to EPF savings as well as pension and insurance protection under the applicable EPFO schemes. The government's estimate is that more than 51 lakh additional employees will be brought under mandatory coverage.
In simple terms, the old ₹15,000 cut-off meant an employee earning above that amount could remain outside mandatory EPFO coverage when joining a job. The new ₹25,000 ceiling widens that threshold.
Then why is AITUC asking for ₹30,000?
AITUC has criticised the ₹25,000 ceiling as "too little and too late" and wants the government to raise it further to ₹30,000.
The trade union argues that the ₹15,000 ceiling was left unchanged for 12 years while wages, prices and the cost of living increased. It says EPFO coverage should keep pace with workers' earnings, minimum wages, inflation and living costs.
AITUC also says its demand for a higher ceiling had been raised with the government and EPFO over several years. According to the union, employee representatives in the EPFO Central Board had pushed for a ₹25,000 ceiling, including a specific proposal in February 2024.
The union now wants the limit to go up to ₹30,000 so that more employees can qualify for mandatory social security coverage.
Will the new EPFO rule reduce your take-home salary?
This is an important concern for employees moving into the expanded coverage.
AITUC has specifically warned that expanding social security should not result in workers receiving a lower monthly pay packet. It has demanded that the employer's statutory EPFO contribution should be paid over and above the employee's existing agreed wages and CTC, rather than being deducted from or adjusted against those wages.
That is a demand raised by the trade union, not a statement that every employee's take-home salary will automatically fall because of the new ceiling.
For employees, the actual impact on monthly salary will depend on how EPFO contributions are calculated and applied to their employment terms under the applicable rules.
What AITUC wants next
AITUC is seeking a further increase in the EPFO wage ceiling from ₹25,000 to ₹30,000. It also argues that the ceiling should be revised periodically rather than remaining unchanged for long periods.
The wider issue is the gap between the wage limit used for mandatory social security coverage and the earnings of workers. AITUC's argument is that the ceiling should move in line with wages, inflation and the cost of living.
For now, the government-approved ceiling stands at ₹25,000, with the revised limit effective from September 17, 2026.
With PTI inputs